Here's What National Building and Marketing Co.'s (TADAWUL:9510) Shareholder Ownership Structure Looks Like

The big shareholder groups in National Building and Marketing Co. (TADAWUL:9510) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

National Building and Marketing has a market capitalization of ر.س4.5b, so we would expect some institutional investors to have noticed the stock. In the chart below, we can see that institutions don't own shares in the company. We can zoom in on the different ownership groups, to learn more about National Building and Marketing.

Check out our latest analysis for National Building and Marketing

What Does The Lack Of Institutional Ownership Tell Us About National Building and Marketing?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of National Building and Marketing, for yourself, below.

National Building and Marketing is not owned by hedge funds. Our data suggests that Fahad Bin Al-Thunayan, who is also the company's Member of Management Board, holds the most number of shares at 80%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. The second and third largest shareholders are Mohammad Saleh Al Awwad and Obaid Bin Al Subaie, with an equal amount of shares to their name at 0.01%. Interestingly, the second-largest shareholder, Mohammad Saleh Al Awwad is also Member of Management Board, again, pointing towards strong insider ownership amongst the company's top shareholders.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of National Building and Marketing

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders own more than half of National Building and Marketing Co.. This gives them effective control of the company. Insiders own ر.س3.6b worth of shares in the ر.س4.5b company. That's extraordinary! It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public holds a 20% stake in National Building and Marketing. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for National Building and Marketing (of which 1 makes us a bit uncomfortable!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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